18 Nov Getting into Energy Storage

New advanced energy storage technologies provide an opportunity to enhance the efficiency, affordability, resiliency and cleanliness of the electric grid by modernizing the way we generate and deliver electricity. Many states are exploring advanced energy storage as a key component of their future electric system with California, Oregon, and Massachusetts all having enacted legislation to establish goals for energy storage adoption. Similarly, the wholesale market operators are currently undergoing stakeholder initiatives aimed at better incorporating distributed energy resources, including advanced energy storage, into their markets.

The term “energy storage” applies to many different technologies, including batteries, flywheels, and pumped hydroelectric storage among others. Pumped hydroelectric storage has been around for many years. The new focus on energy storage is primarily on batteries, flywheels, and other new technology often referred to as “advanced energy storage.” Prices for advanced storage technologies, such as batteries and flywheels, have decreased significantly in recent years. According to multiple sources, lithium-ion battery prices decreased over 50% between 2012 and 2015, and are expected to decrease over 50% again before 2019. As a result of lowering cost and improved performance, energy storage has moved out of the labs and into operation on today’s electric grid with over 500 MWs of advanced

energy storage currently operating in the United States. That figure is expected to double by 2019 and double again to over 2GW by 2020.

Retail marketers should be considering including energy storage in some way as it is capable of providing services across the entire electricity value chain—from grid connected capacity to customer bill management.Consideration should be given to storage as a product offering to customers and within the ESCO’s supply portfolio.

An energy storage offering can be a significant value-add to an ESCO’s customers by:

Improving their power reliability and ensure continuity during power outages;

Better managing their electric bill by managing peaks and allowing improved utilization of time of use rates; and,

Recognizing additional value by participating in demand response programs offered by their supplier, a curtailment service provider, or their utility.

Energy storage can be used to time shift hedge energy from periods of excess and / or low volatility to periods in which the LSE needs additional hedge energy and during high volatility. By including energy storage in the package of energy supply products, ESCOS will have more flexibility in serving load, and in turn reduce the cost of service. Storage can also allow an ESCO to hedge against volatility in the spot market. For the ESCOs that own renewable generation or have customers with solar power generation, energy storage can be deployed to firm the renewable generation.